In the Supreme Court of the United States

Transcription

1 No In the Supreme Court of the United States COY A. KOONTZ, JR., PETITIONER v. ST. JOHNS RIVER WATER MANAGEMENT DISTRICT ON WRIT OF CERTIORARI TO THE SUPREME COURT OF FLORIDA BRIEF FOR THE UNITED STATES AS AMICUS CURIAE SUPPORTING RESPONDENT EARL H. STOCKDALE Chief Counsel MARTIN R. COHEN Assistant Chief Counsel for Litigation DANIEL INKELAS Assistant Counsel Army Corps of Engineers Washington, D.C SCOTT C. FULTON General Counsel DAVID F. COURSEN KARYN WENDELOWSKI Attorneys Environmental Protection Agency Washington, D.C DONALD B. VERRILLI, JR. Solicitor General Counsel of Record IGNACIA S. MORENO Assistant Attorney General EDWIN S. KNEEDLER Deputy Solicitor General LEWIS S. YELIN Assistant to the Solicitor General KATHERINE J. BARTON DAVID C. SHILTON Attorneys Department of Justice Washington, D.C (202)

2 QUESTIONS PRESENTED 1. Whether a regulatory takings claim based on the government s denial of a development permit should be analyzed under the usual framework of Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978), or, instead, under the specialized framework of Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), which this Court developed in the context of land-use exactions. 2. Whether a condition on a development permit that requires a landowner to expend money can be the basis of an exaction-takings claim under Nollan and Dolan. (I)

3 TABLE OF CONTENTS Page Interest of the United States... 1 Statement... 2 Summary of argument Argument: I. Petitioner s takings claim based on respondent s denial of a permit to fill wetlands is properly analyzed under the Penn Central framework A. Penn Central provides the general standards for analyzing a regulatory-takings claim B. An exaction-takings claim requires the actual appropriation of property II. Conditioning the grant of a permit on an obligation to spend money does not constitute an exaction taking A. Imposition of an obligation to spend money supports a takings claim, if at all, only under Penn Central B. Petitioner s argument to the contrary lacks merit Conclusion Cases: TABLE OF AUTHORITIES Arkansas Game & Fish Comm n v. United States, 133 S. Ct. 511 (2012) Armstrong v. United States, 364 U.S. 40 (1960) Boston Chamber of Commerce v. City of Boston, 217 U.S. 189 (1910) Brown v. Legal Found., 538 U.S. 216 (2003) Chicago, Burlington & Quincy R.R. v. Chicago, 166 U.S. 226 (1897) (III)

4 IV Cases Continued: Page City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687 (1999)... 15, 17, 26, 27, 28 Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211 (1986) County of Mobile v. Kimball, 102 U.S. 691 (1881) Department of Agric. & Consumer Servs. v. Polk, 568 So. 2d 35 (Fla. 1990) Dolan v. City of Tigard, 512 U.S. 374 (1994)... passim Eastern Enters. v. Apfel, 524 U.S. 498 (1998)... 17, 18, 31, 32, 33 Hodel v. Virginia Surface Mining & Reclamation Ass n, Inc., 452 U.S. 264 (1981) Koontz v. St. Johns River Water Mgmt. Dist., 720 So. 2d 560 (Fla. Dist. Ct. App. 1998) Lambert v. City & Cnty. of San Francisco, 529 U.S (1999)... 25, 26 Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005)... passim Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) Lucas v. South Carolina Coastal Council, 505 U.S (1992)... 19, 20, 23, 29 McKain v. Toledo City Plan Comm n, 270 N.E.2d 370 (Ohio Ct. App. 1971)... 23, 24 Nollan v. California Coastal Comm n, 483 U.S. 825 (1987)... 12, 13, 17, 20, 21, 25 Palazzolo v. Rhode Island, 533 U.S. 606 (2001)... 19, 29 Parks v. Watson, 716 F.2d 646 (9th Cir. 1983)... 23, 24 Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978)... 14, 15, 16, 20, 23 Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922)... 19

5 V Cases Continued: Page Phillips v. Washington Legal Found., 524 U.S. 156 (1998) Rapanos v. United States, 547 U.S. 715 (2006)... 6 Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) Rumsfeld v. Forum for Academic & Inst. Rights, Inc., 547 U.S. 47 (2006) Sherbert v. Verner, 374 U.S. 398 (1963) Tahoe-Sierra Pres. Council v. Tahoe Reg l Planning Agency, 535 U.S. 302 (2002) United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985)... 3 United States v. Sperry Corp., 493 U.S. 52 (1989)... 29, 32, 33 Constitution, statutes and regulations: U.S. Const.: Amend. V (Just Compensation Clause)... 1, 17, 18, 22, 31 Amend. XIV Administrative Procedure Act, 5 U.S.C. 701 et seq Clean Water Act, 33 U.S.C et seq.... 1, 5 33 U.S.C. 1311(a) U.S.C. 1344(a) U.S.C. 1362(6) U.S.C. 1362(7)... 5 Clean Water Act of 1977, Pub. L. No , 91 Stat Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C et seq

6 VI Statutes and regulations Continued: Page Federal Water Pollution Control Act Amendments of 1972, Pub. L. No , 2, 86 Stat. 884, as amended, Pub. L. No , 67(a) and (b), 91 Stat (33 U.S.C. 1344(a))... 5 National Defense Authorization Act for Fiscal Year 2004, Pub. L. No , 314(b), 117 Stat Florida Administrative Procedure Act (Fla. Stat ) (7)(e) U.S.C et seq U.S.C et seq U.S.C U.S.C et seq Fla. Stat. (1993): (1) (1)(c) (1) (1)(a) (1)(b) (3) C.F.R.: Section 320.2(f)... 6 Section 320.4(a)(1)... 6 Section 320.4(b)-(q)... 6 Section 320.4(r)... 6 Section Section 328.3(a)(2)... 6

7 VII Regulations Continued: Page Section 328.3(a)(7)... 6 Section 328.3(b)... 6 Sections Section 332.1(a)... 6 Section Section 332.3(a)(1)... 7 Section 332.3(b)(2)... 7 Section 332.3(b)(3)... 7 Section 332.3(b)(4)... 7 Section 332.3(b)(5)... 7 Section 332.3(b)(6)... 7 Section 332.3(f)(1)... 8 Section 332.3(f)(2)... 8 Section 332.3(h)(2)... 8 Section 332.4(a) Section C.F.R.: Section Sections Fla. Admin. Code Ann. (1994): r (1)... 9 r (10)... 9 r (2)... 9 rr to r (3) r (4)... 10, 29 r (5) r r (2) r. 40C-4.041(1)... 9

8 VIII Regulations Continued: Page r. 40C-4.041(2)(b)(10)... 9 r. 40C-4.301(2)(a)(7)... 9 r. 40C (5)(d)(1)... 9 r. 40C (5)(d)(5)... 9 Miscellaneous: Fish & Wildlife Serv., U.S. Dep t of the Interior: Florida s Wetlands, An Update on Status and Trends 1985 to 1996 (2005)... 8 Report to Congress: Status and Trends of Wetlands in the Conterminous United States 1998 to 2004 (2005)... 5 Report to Congress: Status and Trends of Wetlands in the Conterminous United States, 2004 to 2009 (2011)... 4 Report to Congress: Wetlands Losses in the United States, 1780 s to 1980 s (1990)... 4 Natural Resources Conservation Service, U.S. Dep t of Agric., News Release (Dec. 11, 2012), /wps/portal/nrcs/ detail/national/newsroom/releases/?cid= stelprdb U.S. Envtl. Prot. Agency: Economic Benefits of Wetlands (May 2006), outreach/upload/economicbenefits.pdf... 3, 4 Functions and Values of Wetlands (Sept. 2001), http: //water.epa.gov/type/wetlands /outreach/upload/fun_val_pr.pdf... 3 Threats to Wetlands (Sept. 2001), water. epa. gov/type/wetlands/ outreach/upload/threats_pr.pdf... 5

9 IX Miscellaneous Continued: Page Wetlands Definitions, epa.gov/lawsregs/guidance/wetlands/ definitions.cfm (last visited Dec. 26, 2012)... 3 Wetlands: Protecting Life and Property from Flooding (May 2006), epa.gov/type/wetlands/outreach/ upload/flooding.pdf... 3

10 In the Supreme Court of the United States No COY A. KOONTZ, JR., PETITIONER v. ST. JOHNS RIVER WATER MANAGEMENT DISTRICT ON WRIT OF CERTIORARI TO THE SUPREME COURT OF FLORIDA BRIEF FOR THE UNITED STATES AS AMICUS CURIAE SUPPORTING RESPONDENT INTEREST OF THE UNITED STATES This case concerns a challenge under the Just Compensation Clause of the Fifth Amendment to a state water management district s denial of a land development permit. Most of the property the landowner sought to develop was wetlands located in a protected zone of a river basin. The permit denial was based on the district s conclusion that the landowner had proposed insufficient mitigation to offset the impact of the planned destruction of the wetlands. In implementing the Clean Water Act, 33 U.S.C et seq. the federal government administers programs intended to avoid or minimize adverse impacts to wetlands caused by discharges of dredged or fill material. In deciding whether to grant permits authorizing discharges of such material into wetlands, the federal government considers whether the permit applicant could compensate for the pro- (1)

11 2 posed loss of resources through mitigation. The United States has a substantial interest in the sound development of the relevant constitutional analysis in cases that may affect its ability to implement the Clean Water Act, consistent with constitutional protections. The United States also has a substantial interest in supporting state governments efforts to protect the Nation s wetland resources, consistent with constitutional requirements. STATEMENT Wetlands are an important natural resource, and their depletion has caused significant economic and environmental harm. Like the federal government, Florida has taken measures to protect remaining wetlands and to replace some of what has been lost. When a landowner seeks a development permit for a project that will destroy wetlands, both the federal government and Florida require the landowner to mitigate the loss as a condition of issuing the permit. Petitioner sought to undertake such a project. 1 Finding petitioner s proposed mitigation insufficient, respondent suggested several possible alternative measures, including that petitioner enhance publicly owned wetlands at another location. Because petitioner declined to undertake the mitigation suggested by respondent or propose an acceptable alternative, respondent denied petitioner s permit request. Petitioner brought this inverse condemnation action, alleging that respondent s proposed off-site mitigation constituted an exaction taking without 1 Coy A. Koontz, Sr., owned the property at issue and sought the development permit. Pet. Br. 2. Petitioner Coy A. Koontz, Jr., is the son of Coy A. Koontz, Sr., and the personal representative of his estate. Id. at 2 n.2. This brief uses petitioner to refer to either or both individuals, without distinguishing between them.

12 3 just compensation. The Supreme Court of Florida rejected that claim. 1. Wetlands are, generally, lands where saturation with water is the dominant factor determining the nature of soil development and the types of plant and animal communities living in the soil and on its surface. U.S. Envtl. Prot. Agency (EPA), Wetlands Definitions, Wetlands are essential to the environmental and economic well-being of the United States. A oneacre wetland can soak up and store a significant amount of water, typically about one million gallons. EPA, Wetlands: Protecting Life and Property from Flooding 1 (May 2006), /upload/flooding.pdf. For that reason, wetlands act as natural buffers, reducing the frequency and intensity of inland and coastal flooding. EPA, Economic Benefits of Wetlands (Economic Benefits) 1 (May 2006), water.epa.gov/type/wetlands/outreach/upload/economic Benefits.pdf. Wetlands are also natural filters, absorbing pollution, thus improving drinking water quality and protecting fish and other aquatic life. Economic Benefits 1. Wetlands are vital to the Nation s multi-billion-dollar fishing industry. Seventy-five percent of the fish and shellfish commercially harvested in the United States and 90 percent of the recreational fish catch depend on wetlands at some point in their life cycle. Id. at 3; see EPA, Functions and Values of Wetlands 2 (Sept. 2001), http: //water.epa.gov/type/wetlands/outreach/upload/fun_val_ pr.pdf (estimating that almost $79 billion per year is generated from wetland-dependent species ); see generally United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, (1985) (discussing ecological im-

13 4 portance of wetlands); Br. of Amici Former Members of the Nat l Research Council 5-10 (same). Despite their importance, [w]etlands are disappearing at a rapid rate. Fish & Wildlife Serv. (FWS), U.S. Dep t of the Interior, Report to Congress: Wetlands Losses in the United States, 1780 s to 1980 s ii (Losses) (1990). Over a period of 200 years, the lower 48 states lost an estimated 53 percent of their original wetlands, id. at 1, equaling approximately 117 million acres, see id. at 5. That loss has had significant economic consequences. The disappearance of wetlands in the Upper Mississippi Basin, for instance, contributed to high floodwaters during the Great Flood of 1993 that caused billions of dollars in damage. Economic Benefits 1. The disappearance of wetlands also undermines the integrity of the Nation s drinking water supply. Losses 10. Congress responded to the dramatic decline in wetlands in several ways. In the mid-1980s, Congress authorized federal acquisition of wetlands. 16 U.S.C. 3922; see also 16 U.S.C et seq. It also confined eligibility for certain farm benefits to crops not grown on converted wetlands. 16 U.S.C et seq. And, in 1990, Congress directed the Secretary of Agriculture to establish a Wetlands Reserve Program, a voluntary program under which the Natural Resources Conservation Service (NRCS) provides technical and financial support to help landowners restore and protect wetlands. 16 U.S.C et seq. Acting under these and other authorities, the federal government has helped reduce the rate of decline in wetlands from 458,000 acres per year from the mid- 1950s to the mid-1970s to 13,800 acres per year between 2004 and FWS, Report to Congress: Status and

14 5 Trends of Wetlands in the Conterminous United States, 2004 to 2009, at 40 (2011) (2011 Status and Trends); see also FWS, Report to Congress: Status and Trends of Wetlands in the Conterminous United States, 1998 to 2004, at 16 (2006) ( [a]gricultural conservation programs were responsible for most of the gross wetland restoration between 1998 and 2004); NRCS, News Release (Dec. 11, 2012) (noting that, in two decades, over 11,000 landowners have participated in the Wetlands Reserve Program, restoring more than 2.6 million acres of wetlands), /wps/portal/nrcs/detail /national/newsroom/releases/?cid=stelprdb Today, development pressure is emerging as the largest cause of wetland loss. EPA, Threats to Wetlands 1 (Sept. 2001), /outreach/upload/threats_pr.pdf; see 2011 Status and Trends 42 (identifying development and silviculture as the principal causes of wetland losses between 2004 and 2009). The Clean Water Act addresses that threat at the federal level. That statute prohibits the discharge of any pollutant into navigable waters. 33 U.S.C. 1311(a); see 33 U.S.C. 1362(6) (defining pollutant to include dredged spoil as well as rock, sand, and cellar dirt ); 33 U.S.C. 1362(7) (defining navigable waters as the waters of the United States ). Section 404 of the Clean Water Act authorizes the Army Corps of Engineers (Corps) to issue permits * * * for the discharge of dredged or fill material into the navigable waters. Federal Water Pollution Control Act Amendments of 1972, Pub. L. No , 2, 86 Stat. 884, as amended by the Clean Water Act of 1977, Pub. L. No , 67(a) and (b), 91 Stat (33 U.S.C. 1344(a)). The Corps has used its Clean Water Act permitting authority to protect against environmental losses to the

15 6 waters of the United States, including covered wetlands. See Rapanos v. United States, 547 U.S. 715, 742 (2006) (plurality op.); id. at 767 (Kennedy, J., concurring in the judgment). Under regulations promulgated pursuant to Section 404, the Corps requires permits to discharge dredged or fill materials into covered wetlands. 33 C.F.R ; see 33 C.F.R (a)(2), (7) and (b) (defining waters of the United States to include specified wetlands). In deciding whether to grant any permit under its authority, the Corps undertakes a public interest review, which considers numerous factors (including flood hazards, water quality, and considerations of property ownership ), 33 C.F.R (a)(1), and weighs the reasonably expected benefits of granting a permit against the reasonably foreseeable harms, ibid. See 33 C.F.R (b)-(q) (explaining factors in detail). In deciding whether to issue a permit for a proposed discharge of dredged or fill material into wetlands, the Corps evaluates whether the discharge would be consistent with guidelines jointly developed by the Corps and the EPA. 33 C.F.R (f); see 40 C.F.R The Corps also generally considers whether mitigation measures, such as project modifications, could ameliorate the expected loss of natural resources. 33 C.F.R (r). Pursuant to Congress s direction, see National Defense Authorization Act for Fiscal Year 2004, Pub. L. No , Div. A, 314(b), 117 Stat. 1431, the Corps and the EPA jointly promulgated criteria for compensatory mitigation designed to offset unavoidable impacts to wetlands and other covered waters when the Corps issues permits under Section 404. See 33 C.F.R (a); see generally 33 C.F.R ; 40 C.F.R ).

16 7 Compensatory mitigation under the Corps/EPA standards means the restoration (reestablishment or rehabilitation), establishment (creation), enhancement, and in certain circumstances preservation of aquatic resources for the purposes of offsetting unavoidable adverse impacts which remain after all appropriate and practicable avoidance and minimization has been achieved. 33 C.F.R There are three mechanisms for compensatory mitigation. Under permitteeresponsible mitigation, the landowner applying for a permit must undertake the required mitigation, either on the site of the project or offsite. 33 C.F.R (b)(4), (5) and (6). Alternatively, a permittee can purchase credits from a mitigation bank or an in-lieu fee program, which perform mitigation off-site to compensate for adverse impacts authorized by Corps-issued permits C.F.R , 332.3(b)(2) and (3), Although it is the permit applicant s responsibility to propose an appropriate compensatory mitigation option, mitigation banks and in-lieu fee programs are now the federal government s preferred options because they usually involve consolidating compensatory mitigation projects where ecologically appropriate, consolidating resources, providing financial planning and scientific expertise (which often is not practical for permitteeresponsible compensatory mitigation projects), reducing temporal losses of functions, and reducing uncertainty over project success. 33 C.F.R (a)(1); see 33 C.F.R (b)(2) and (3). But, regardless of the mechanism used, the amount of required compensatory mitigation must be, to the extent practicable, sufficient 2 Mitigation banks and in-lieu fee programs have similar functions, but the rules governing their operation differ. See 33 C.F.R ,

17 8 to replace lost aquatic resource functions. 33 C.F.R (f)(1). In determining the necessary amount of mitigation, the Corps considers the method of compensatory mitigation and the likelihood of success, differences between the functions lost at the impact site and the functions expected to be produced by the compensatory mitigation project, temporal losses of aquatic resource functions, the difficulty of restoring or establishing the desired aquatic resource type and functions, and/or the distance between the affected aquatic resource and the compensation site. 33 C.F.R (f)(2). Thus, for example, because preserving one acre of wetlands for the destruction of another would result in a net loss, a mitigation ratio greater than one-to-one is necessary and should include wetlands restoration, establishment, or enhancement to replace lost functions. Ibid.; 33 C.F.R (h)(2). 3. Like most States, Florida has lost substantial portions of its wetlands. See FWS, Florida s Wetlands: An Update on Status and Trends, 1985 to 1996, at 7-8 (2005) (reporting that, of the 20.3 million acres of Florida wetlands existing in 1845, only 11.4 million survived in 1996). And like the federal government, Florida has taken steps to arrest that loss. Florida is divided into five water management districts. Fla. Stat (1) (1993). 3 Respondent is one. Id (1)(c). Florida law prohibits any person from dredging or filling surface waters without a permit. Id , A permit may be issued only if the permitting agency determines that the proposed project is not contrary to the public interest, considering various enumerated 3 All citations to the Florida Statutes are to the 1993 edition.

18 9 factors, such as the project s effect on the public health, safety, or welfare or the property of others, and conservation of fish and wildlife. Id (1) and (a). At the time of the proposed project at issue in this case, a landowner wishing to fill or drain wetlands within respondent s jurisdiction was required to obtain two permits. See Fla. Admin. Code (1), 40C (1) and (2)(b)(10) (1994). 4 The first, a wetland resource management permit, would issue only upon the applicant s reasonable assurance that the development was consistent with the statutory public interest standard described above. Id (2). The second, a permit for management and storage of surface waters, required the applicant to provide reasonable assurance that, among other things, the project would not adversely affect [w]etland functions. Id. 40C (2)(a)(7). If the project was in a designated riparian wildlife habitat zone, an applicant for the second permit also had to provide reasonable assurance that the project would not adversely affect the wetlandsdependent species located on the project site. Id. 40C (5)(d)(1). Florida law (now and at the time of the proposed project) does not, however, require outright denial of a permit if a proposed project does not satisfy those standards. Like the Corps Section 404 regulations, Florida law allows an applicant to propose mitigation measures to ameliorate the effect of wetlands destruction that the project would cause. Fla. Admin. Code (10), to , 40C (5)(d)(5). Mitigation proposals typically involve the creation, enhancement or preservation of wetlands. Id All citations to the Florida Administrative Code are to the 1994 edition.

19 Respondent has a preference for creation and enhancement measures over preservation. J.A. Ex. 147, 152, But Florida law does not require an applicant to undertake any particular form of mitigation, Fla. Admin. Code (4), and it remains the applicant s responsibility to propose appropriate mitigation, Fla. Stat (1)(b). Of course, an applicant who fails to propose any adequate mitigation measures when such measures are necessary to offset expected adverse effects is unlikely to receive a permit. See Fla. Admin. Code (3) and (5); see also id (2) (mitigation must offset loss). For that reason, permitting agencies, such as respondent, may suggest alternative mitigation measures for the applicant s consideration. Id (4) Coy A. Koontz, Sr., owned a 14.2-acre parcel of undeveloped land in Orange County, Florida. Pet. App. A5. All but approximately 1.4 acres of the tract lies within a Riparian Habitat Protection Zone * * * of the Econlockhatchee River Hydrological Basin and is subject to jurisdiction of [respondent]. Ibid. Approximately 11 acres of the parcel were wetlands bisected by a tributary of the Econlockhatchee River. J.A. 73. In 1994, petitioner applied for permits authorizing commercial development of 3.7 acres of the property. Ibid. The project required dredging and filling 3.4 acres of wetlands within the protection zone. J.A Accordingly, petitioner applied for the two necessary permits. J.A. 73; see p. 9, supra. To minimiz[e] the im- 5 Since the conduct at issue in this case, Florida has adopted the use of mitigation banks to minimize mitigation uncertainty associated with traditional mitigation practices and provide greater assurance of mitigation success. J.A. Ex. 114; see Fla. Stat ; p. 7, supra (discussing mitigation banks under federal regulations).

20 11 pact of his proposed development, petitioner proposed to perpetually preserve the balance of the site in its natural state through a conservation easement dedicated to respondent. J.A. Ex. 13; see id. at 45, 89. In considering petitioner s application, respondent s technical staff visited the property to evaluate the likely impact of the proposed project. J.A. Ex The staff determined that the wetlands provide a diversity of habitat and food sources, and serve as an important refuge for a variety of wildlife species. Id. at 85. Based on the high quality of the wetlands, and the impacts proposed to these areas, the staff concluded that petitioner s preservation proposal was insufficient to offset the expected loss of wetlands. Id. at 89. The staff suggested (id. at 87) various alternatives that would have reduced the project s impact to acceptable levels, including project design modification (id. at 87-88), reduction of the development s size (id. at 91-92; see also J.A ), and a variety of possible off-site mitigation enhancement options, such as replacing 15 inoperative culverts in a state-owned nature preserve within the same river basin (J.A. Ex. 90; see id. at 90-91). Petitioner also could have combined his proposed conservation easement with off-site mitigation that might have required as little as the installation of one culvert and the removal of another. Id. at 91; J.A But petitioner was unwilling to consider any additional mitigation options. J.A. Ex. 90; see J.A. 37. Accordingly, the technical staff concluded that petitioner s application failed to satisfy the permitting standards and recommended denying the permits. J.A. Ex. 92. After a hearing, J.A , respondent denied petitioner s applications, J.A , Noting the various mitigation alternatives the technical staff had sug-

21 12 gested that would have been sufficient to offset the loss of wetlands, J.A , respondent concluded that petitioner s proposal to permanently preserve the remaining acres, but without any offset for the loss of wetlands, was inadequate, J.A. 52, 62-63; see J.A. 49, 60 (finding that petitioner could have proposed alternative mitigation); see also J.A. 75 (petitioner s admission of same). 5. a. Under Florida law, as a party aggrieved by a decision of a water management district, petitioner could have sought judicial review of the decision denying the permits under the Florida Administrative Procedure Act. Fla. Stat Instead of challenging the district s decision, however, petitioner brought an inverse condemnation action seeking compensation for respondent s alleged taking of petitioner s property without just compensation in violation of the Florida Constitution. J.A ; see Fla. Stat ; see also Department of Agric. & Consumer Servs. v. Polk, 568 So. 2d 35, 38 (Fla. 1990) ( [T]he propriety of an agency s action may not be challenged in an inverse condemnation proceeding. ). The circuit court initially denied petitioner s regulatory-takings claim as unripe, but that ruling was reversed on appeal. See Koontz v. St. Johns River Water Mgmt. Dist., 720 So. 2d 560 (Fla. Dist. Ct. App. 1998). On remand, the circuit court held that the off-site mitigation conditions imposed upon [petitioner] by [respondent] resulted in a regulatory taking of [petitioner s] property. Pet. App. D1. Petitioner had argued that respondent s denial of his permit applications constituted a taking without compensation under an exaction-takings theory, relying on this Court s decisions in Nollan v. California Coastal Commission, 483

22 13 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994). Pet. App. D5, D7. Although the circuit court viewed those decisions as distinguishable, id. at D6-D7, it believed that application of Nollan and Dolan was mandated by the appellate court s prior remand order. Id. at D9-D11. Concluding that respondent had failed to demonstrate a nexus between off-site mitigation and the proposed development and did not show rough proportionality between the two, the circuit court held that respondent s denial resulted in a regulatory taking. Id. at D11; see Nollan, 483 U.S. at 837 (establishing nexus requirement); Dolan, 512 U.S. at 391 (establishing rough proportionality requirement). The court did not consider the other mitigation options suggested by respondent. In light of that decision, respondent had three choices: It could issue the permits, pay monetary compensation, or modify its decision. Fla. Stat (3). Respondent chose to issue the permits authorizing petitioner s project with petitioner s proposed preservation of acres as the only mitigation. J.A. 183; J.A. Ex. 5; see Resp. Br. 20 (stating that respondent made that choice in light of the significant deterioration of the quality of the wetlands on petitioner s property during the course of the litigation). The circuit court subsequently awarded petitioner $376,154 for temporary takings damages for the period between respondent s denial of the permits and its eventual grant. Pet. App. C2. That amount was based on rents petitioner lost as a result of respondent s permit denials. Id. at B20. b. A Florida district court of appeal affirmed the monetary award in a divided decision. Pet. App. B1- B30. Concluding that Nollan and Dolan provided the appropriate framework for analyzing petitioner s tak-

23 14 ings claim, Pet. App. B8-B9, the appeals court affirmed the circuit court s judgment, upholding the determination that any mitigation in excess of petitioner s preservation proposal would exceed the rough proportionality requirement identified in Dolan. Id. at B10 n.5. The dissent would have held that no exaction had occurred because the permit had been denied and petitioner was not required to give up any interest in real property. Id. at B21-B23; see id. at B23 ( In this case, nothing was ever taken. ). That did not mean that [petitioner] was without a remedy, because petitioner could have challenged the validity of respondent s permit denial. Id. at B23. c. The Supreme Court of Florida granted review to consider whether an exaction taking occurs under the United States or Florida Constitutions where the condition imposed on the landowner does not involve the dedication of an interest in or over real property or where no permit is issued by the regulatory entity. Pet. App. A3; see id. at A2 ( This Court has previously interpreted the takings clause of the Fifth Amendment and the takings clause of the Florida Constitution coextensively. ). Canvassing this Court s takings decisions, the Supreme Court of Florida observed that regulatory takings challenges are governed by the standard articulated in Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978), which principally focuses on the economic impact of the regulation on the landowner, the extent to which the regulation interferes with the landowner s reasonable investment-backed expectations, and the character of the governmental action. Pet. App. A12; see 438 U.S. at 124. The court explained that this Court developed the theory of exaction takings in

24 15 Nollan and Dolan to address government demands that landowners dedicate easements over their land to allow the public access across their property as a condition of obtaining development permits. Id. at A16. In the Florida court s view, however, this Court had declined to extend Nollan and Dolan beyond that specific context. Id. at A15-A17 (discussing City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687 (1999), and Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005)). Accordingly, the court held that this Court s framework for exaction takings is applicable only where the condition/exaction sought by the government involves a dedication of or over the owner s interest in real property in exchange for permit approval; and only when the regulatory agency actually issues the permit sought, thereby rendering the owner s interest in the real property subject to the dedication imposed. Id. at A19. Because respondent did not condition approval of the permits on [petitioner s dedication of] any portion of his interest in real property in any way to public use, and because respondent did not issue permits and so nothing was ever taken from [petitioner], the Supreme Court of Florida reversed the lower court s judgment. Pet. App. A21. SUMMARY OF ARGUMENT The government s denial of a development permit can be the basis for a Fifth Amendment claim for compensation under Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978), but not under an exaction-takings theory. Similarly, the exaction-takings framework does not provide the appropriate analysis for a taking premised on the government s conditioning of a permit on the expenditure of money.

25 16 I. Government regulation of private property may effect a regulatory taking if it is so onerous that it is functionally equivalent to the classic taking in which government directly appropriates private property or ousts the owner from his domain. Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 539 (2005). Whether a regulation has such an effect usually is determined by considering the factors identified in Penn Central. See 438 U.S. at 124. This Court has employed a different analysis in cases in which the government granted a development permit that contained a condition requiring a landowner to forfeit a property right. Governments must provide just compensation for such land-use exactions, Lingle, 544 U.S. at 546, unless the government demonstrates a nexus between the permit condition and the government s regulatory interest and shows that the condition is roughly proportional to the impact of the proposed project. Dolan v. City of Tigard, 512 U.S. 374, 386, 391 (1994). A necessary precondition to any takings claim is government action that impairs some property interest. If the government denies a development permit because the landowner refuses to accept a condition that would constitute a per se taking, the landowner cannot state a claim for compensation for a deprivation that did not occur. In that situation, the government s permit denial may support a takings claim under Penn Central s multi-factor analysis. But such a taking would not be a land-use exaction. A landowner also could challenge the validity of the permit condition, including by arguing that the government cannot constitutionally condition the permit on a requirement that the landowner dedicate a specified portion of his property to public use. Such a challenge to the validity of agency s decision,

26 17 however, is logically prior to and distinct from the question whether a regulation effects a taking. Lingle, 544 U.S. at 543. This Court s exaction-takings cases are fully consistent with the conclusion that government denial of a permit cannot support an exaction-takings claim for compensation. In Nollan v. California Coastal Commission, 483 U.S. 825 (1987), the government approved a permit that required the landowners to grant a public easement on their property, and that easement may have actually attached. And in Dolan, a condition requiring the dedication of property for public use would have attached had the landowner acted on the permit the government granted. By contrast, when the government denies a permit based on a landowner s refusal to accede to an impairment of a property right, the government neither takes that property right nor threatens to do so. The Supreme Court of Florida s judgment is consistent with these principles. Reversal of that decision would impose inappropriate burdens and costs on state and federal land-use regulation and would not be in the interests of either landowners or the government. II. Although the Fifth Amendment s requirement of just compensation is not limited to government appropriations of real property interests, a permit conditioned on an expenditure of money does not constitute an exaction taking. Under Justice Kennedy s approach and that of the four dissenting Justices in Eastern Enterprises v. Apfel, 524 U.S. 498 (1998), a requirement to pay money from unidentified sources does not qualify as a taking at all. See id. at ; see id. at 554 (Breyer, J., dissenting). And under the plurality s approach in Eastern Enterprises, whether such a condition constitutes a

27 18 taking would be determined by applying the Penn Central framework, not the exaction-takings analysis of Nollan and Dolan. See id. at Petitioner contends that the Court should examine a permit condition requiring the expenditure of money as an exaction taking, because a requirement that petitioner dedicate money to a public use would be a per se taking if not imposed as a condition of a permit. Petitioner s argument is incorrect. Governments routinely require individuals to spend money for public purposes through the imposition of taxes and fees, yet it is settled that taxes and fees do not qualify as takings. Moreover, because landowners have the ability to challenge the government s requirement to spend money on other grounds, there is no need to expand the exaction-takings doctrine to protect landowners interests. ARGUMENT I. PETITIONER S TAKINGS CLAIM BASED ON RESPON- DENT S DENIAL OF A PERMIT TO FILL WETLANDS IS PROPERLY ANALYZED UNDER THE PENN CENTRAL FRAMEWORK A. Penn Central Provides The General Standards For Analyzing A Regulatory-Takings Claim The Just Compensation Clause of the Fifth Amendment, made applicable to the States through the Fourteenth Amendment, see Chicago, Burlington & Quincy R.R. v. Chicago, 166 U.S. 226 (1897), provides that private property shall not be taken for public use, without just compensation. The purpose of that restriction is to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole. Arkansas Game & Fish Comm n v. United States, 133 S. Ct. 511, 518 (2012) (quoting Armstrong v. United States, 364

28 19 U.S. 40, 49 (1960)). The paradigmatic taking requiring just compensation is a direct government appropriation or physical invasion of private property. Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537 (2005). If the government engages in such a per se taking, it has a categorical duty to compensate the former owner. Arkansas Game, 133 S. Ct. at 518 (quoting Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg l Planning Agency, 535 U.S. 302, 322 (2002)). Outside that paradigmatic setting, this Court has recognized that government regulation of property that goes too far constitutes a taking requiring just compensation. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922). But regulation of economic affairs and land use is extensive, and virtually all such regulation adversely affects some members of the community. Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law. Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1018 (1992) (quoting Mahon, 260 U.S. at 413); see also Palazzolo v. Rhode Island, 533 U.S. 606, 627 (2001) ( The right to improve property, of course, is subject to the reasonable exercise of state authority, including the enforcement of valid zoning and land-use restrictions. ). Two types of regulatory takings, nonetheless, are sufficiently distinct and significant in their impact that this Court has deemed them per se takings: regulation that imposes a permanent physical invasion of [a landowner s] property, and regulation that completely deprive[s] an owner of all economically beneficial us[e] of the property. Lingle, 544 U.S. at 538 (discussing Loretto v. Teleprompter Manhattan CATV Corp., 458

29 20 U.S. 419 (1982), and quoting Lucas, 505 U.S. at 1019) (first two alterations added). Other regulations that interfere with the use of property may effect a taking if their application is functionally equivalent to the classic taking in which government directly appropriates private property or ousts the owner from his domain. Lingle, 544 U.S. at 539. Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978), announced standards for identifying such regulation. See Lingle, 544 U.S. at 539. Under that essentially ad hoc, multifactor analysis, courts consider [t]he economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations. Penn Central, 438 U.S. at 124. Also relevant is the character of the governmental action, such as whether the interference stems from a physical invasion by government or, instead, from a public program adjusting the benefits and burdens of economic life to promote the common good. Ibid.; see ibid. (explaining that the former is more likely to constitute a taking than the latter). This Court has employed a different analysis in the context of development permits granted on the condition that a landowner dedicate an easement allowing public access to her property. Lingle, 544 U.S. at 546 (describing Nollan v. California Coastal Comm n, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994)). Such land-use exactions, ibid., involve the impairments of property interests that would constitute appropriations requiring just compensation if the government imposed them outside the permitting context. Id. at ; see Dolan, 512 U.S. at 385 (requirement that landowner deed portions of property to city);

30 21 Nollan, 483 U.S. at 828 (public easement). But unlike a per se taking under Loretto or Lucas, a land-use exaction does not result from unilateral government action. The exaction occurs only if the landowner seeks and obtains authorization to undertake conduct that the government properly may regulate through its police power. See Dolan, 512 U.S. at , 387; Nollan, 483 U.S. at 836. Under the well-settled doctrine of unconstitutional conditions, Dolan, 512 U.S. at 385, the government may not deny a benefit to a person on a basis that infringes his constitutionally protected rights, Rumsfeld v. Forum for Academic & Institutional Rights, Inc., 547 U.S. 47, 59 (2006). Applying that doctrine to land-use exactions, this Court held that the government may not deny a landowner the right to receive just compensation when property is taken for a public use, Dolan, 512 U.S. at 385, unless the government establishes a nexus between the government s legitimate regulatory interest and the permit condition exacted by the [government], id. at 386 (discussing Nollan, 483 U.S. at 837), and unless the government demonstrates, through an individualized determination, that the required dedication is roughly proportional both in nature and extent to the impact of the proposed development, id. at 391; see id. at 391 n.8 (explaining that the burden [is] on the [government] to justify the required dedication ). B. An Exaction-Takings Claim Requires The Actual Appropriation Of Property 1. A necessary precondition to any claim seeking just compensation is government action that actually impairs some property interest to such an extent that it constitutes a taking. See, e.g., Hodel v. Virginia Surface Mining & Reclamation Ass n, Inc., 452 U.S. 264, 294

31 22 (1981) (no taking where plaintiffs failed to identif[y] any property in which [plaintiffs] have an interest that has allegedly been taken ); Boston Chamber of Commerce v. City of Boston, 217 U.S. 189, 194 (1910) (rejecting contention that the city could be made to pay for a loss of theoretical creation, suffered by no one in fact ). Indeed, it is the value of the property right taken that provides the measure of compensation owed. See Brown v. Legal Found., 538 U.S. 216, (2003); Boston Chamber, 217 U.S. at 195. Where the government denies a development permit because a landowner declined to accede to a condition (such as a public easement) that would impair a property right (such as the right to exclude others), the landowner may not state a claim for just compensation based on the impairment of the property interest that would have occurred under the proposed condition, because that impairment did not actually occur. The Just Compensation Clause imposes a payment obligation on the government when property is taken, Dolan, 512 U.S. at 385 (emphasis added), not when the government proposes to take property but does not. Cf. Pet. Br. 15, 24 (urging adoption of just compensation requirement when government attempts to confiscate property ) (capitalization altered and emphasis added). 6 A landowner denied a permit in these circumstances may have a cognizable claim for just compensation. But 6 Petitioner claims the right to compensation for the substantial cost incurred making unrelated [sic] public improvements. Pet. Br. 11; see id. at 15. It is telling, however, that petitioner did not seek, and the circuit court did not award, compensation for any such costs, because they were never incurred. Instead, the circuit court based its compensation award on a calculation of lost rent on petitioner s own property after the permits were denied. Pet. App. C1-C2, B20.

32 23 any such claim must be based on the impact of the permit denial itself on the use of the property, not on the value of a property right that would have been lost if (as never actually happened) the permit had been issued and the development proceeded subject to that condition. Thus, the landowner could argue that the government s denial of a development permit deprived him of all economically beneficial use of the property. Lucas, 505 U.S. at Or the landowner could argue that the permit denial had such a severe economic impact and sufficiently interfered with distinct investment-backed expectations that, under the multi-factor Penn Central analysis, a taking requiring just compensation had occurred. See, e.g., Penn Central, 438 U.S. at Alternatively, the aggrieved landowner would have the option of challenging the validity of the permit denial, arguing that the agency s action was inconsistent with state or federal statutory or constitutional law. See, e.g., Fla. Stat (7)(e); Lingle, 544 U.S. at (Kennedy, J., concurring). In such a proceeding, for example, the landowner could challenge the validity of the permit denial on the basis of the unconstitutional-conditions rationale that informs the exactiontakings doctrine, as occurred in Parks v. Watson, 716 F.2d 646 (9th Cir. 1983), and McKain v. Toledo City Plan Commission, 270 N.E.2d 370 (Ohio Ct. App. 1971), 7 There is a dispute about whether petitioner waived or forfeited any claim under Penn Central. See Resp. Br. 33 n.15. Respondent acknowledges that the issue of waiver or forfeiture should be resolved by the Florida courts, should this Court affirm. Ibid. There appears to be no dispute that petitioner has waived any Lucas claim. See J.A. 76, 163. In any event, such claims generally would be available to a landowner denied a permit on the basis of his rejection of a condition that would qualify as an exaction, had it actually been consummated.

33 24 cases cited by Dolan, see 512 U.S. at 389 n.7 and 391, and mistakenly relied upon by petitioner to support his claim for monetary compensation, Pet. Br See also Resp. Br But a challenge to the underlying validity of the permit denial is quite different from a claim for just compensation for an exaction that was never actually imposed. See Lingle, 544 U.S. at 543 (noting that the question of a regulation s underlying validity is logically prior to and distinct from the question whether a regulation effects a taking ). Should a court determine that a permit denial is unconstitutional or otherwise unlawful, including on the ground that a proposed condition was unconstitutional, the proper remedy would be a declaration to that effect and (if necessary) an injunction prohibiting the state from continuing to deny the permit on the unlawful ground. 8 See, Parks, 716 F.2d at ; McKain, 270 N.E.2d at 375; see also e.g., Sherbert v. Verner, 374 U.S. 398, 410 (1963). 2. The conclusion that the government s denial of a development permit cannot be the basis of a claim for monetary compensation premised on an alleged exaction taking that never occurred is consistent with this Court s Nollan and Dolan decisions. In Nollan, the government approved a development permit on beachfront property, authorizing the landowners to demolish an existing bungalow and replace it with a three-bedroom house. 483 U.S. at The permit was conditioned on the requirement that the 8 Thus, while we agree with petitioner (Pet. Br. 34) that a court properly may invalidate[] an unconstitutional condition underlying a government s decision to deny a permit, petitioner is mistaken in suggesting (id. at 33-39) that such a denial can be the basis for a claim seeking compensation for an exaction that was never imposed.